NEW YORK--(BUSINESS WIRE)--Wall Street Webcasting has prepared and provided for you an exclusive broadcast of Wells Fargo Securities own, Rich Gordon. Gordon is highly recognized for his weekly narrates regarding the fixed income strategy at Wells Fargo Securities (NYSE: WFC). This week, Gordon concentrates on the Affordable Care Act, and the volume of economic data that has come in.
The highly anticipated Nonfarm Payrolls report fell well below expectations; with only 140,000 jobs being added to the economy, compared to the expected 180,000 in the month of September. This decline in economic growth is concerning for the Fed’s plan to taper. Due to the diversity in the recent economic data, Wells Fargo’s strategists’ conclude that this may keep the Fed’s plan to taper from proceeding until after the first quarter of 2014. On the contrary, the unemployment rate has fallen to its lowest that it has been in 5 years; 7.2%. However, this downturn in the unemployment rate is for all the wrong reasons.
There has been some ambiguity surrounding the Affordable Care Act. This has generated some hesitation in many companies hiring decisions. The Nonfarm Payroll Report release for the month of October has been postponed until October 8th. There is some speculation regarding a possible change in policy. However, currently the economy is “trending in the wrong direction for the Fed to implement a change in policy.”
The 10-Year Treasury Yield has rallied more than 20 basis points since the temporary agreement that ended the government shut-down. The economic data is consistent in falling short of expectations. Our analysts foresee that interest rates will trade in a tight pattern until the end of the year, taking into consideration that volatility has been cut in half since September.
To hear a more in depth explanation of which direction the MBS sector is going, and the possible effects it may have on interest rates, please tune into Wells Fargo Securities’ latest video.
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